2013-02-24 15:19:34 - Fast Market Research recommends "Colombia Pharmaceuticals & Healthcare Report Q1 2013" from Business Monitor International, now available

BMI View: Improvements in Colombia's pharmaceutical regulation system will expand local patients' access to medicines. However, it will also put pricing pressures on drugmakers, and promote the use of generic versions, which will undermine the growth of patented drug market. Nevertheless, BMI expects more foreign pharmaceutical companies to invest in Colombia, capitalising on the country's strong longterm growth prospects.

Headline Expenditure Projections

* Pharmaceuticals: COP7,076bn (US$3.83bn) in 2011 to COP7,612bn (US$4.23bn) in 2012; +7.6% in local currency terms and +10.4% in US dollar terms. Forecast broadly in line with Q412.
* Healthcare: COP29,953bn (US$16.21bn) in 2011 to COP31,557bn (US$17.53bn) in 2012; +5.4% growth in local currency terms and +8.2% in US dollar terms. Forecast broadly in line with Q412.
* Medical

devices: COP1,901bn (US$1.03bn) in 2011 to COP2,127bn (US$1.18bn) in 2012; +11.9% growth in local currency terms and +14.9% in US dollar terms. Forecast broadly in line with Q412.


Full Report Details at
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Risk/Reward Rating: Despite a 3% quarter-on-quarter (q-o-q) improvement in its composite score, Colombia slipped from sixth to seventh place out of the 17 countries surveyed in the Americas region. Nevertheless, we retain our positive view of Colombia's longer-term commercial opportunities for pharmaceutical companies, which are supported by factors such as substantial population numbers, steady economic development and underdeveloped pharmaceutical demand. On a negative note, we continue to view intellectual property (IP) shortcomings as problematic.

Key Trends And Developments

* In October 2012, Colombian drugmaker Corpaul launched its pain-relief medicine Traucet (intravenous acetaminophen) in the country. The drug is primarily intended for infants, postoperative patients and elderly patients who are unable to take oral medication. The drug is designed for use by medical staff only and sale by prescription. The launch made Colombia the second country in the Americas, after the US, to manufacture and sell the product.
* In September 2012, the Colombian government approved COP250bn (US$139.4mn) of funding to develop its first national drug policy, aiming to improve access to and proper usage of medicines in the South American country. According to the Ministry of Health, the policy includes ten strategies to address issues of high drug costs, the lack of reliable information in the pharmaceutical sector and the shortage of staff training. It is also designed to improve drug price regulation and monitoring systems.
* In August 2012, Corporacion Farmaceutica Recalcine (CFR), one of the largest drugmakers in Chile, invested US$562mn to acquire Colombia's largest drug producer Laboratorio Franco Colombiano Lafrancol. Laboratorio Franco Colombiano Lafrancol produces and distributes pharmaceutical, nutraceutical, nutritional supplement and functional food products in Colombia and internationally. The acquisition is in line with CFR's global expansion strategy of targeting second-tier emerging markets through mergers and acquisitions. BMI notes that CFR has minimal exposure in highly saturated pharmaceutical markets such as Brazil and Mexico, the two largest markets in Latin America. In 2011, around 1% of its turnover came from Colombia.

BMI Economic View: The ongoing deterioration of the global economy will weigh on Colombian exports more heavily than we previously anticipated. We are therefore revising down our real GDP forecasts from 4.7% to 4.4% in 2012, and from 4.4% to 4.3% in 2013. However, we believe foreign investment in Colombia will remain relatively robust despite global headwinds, supporting a positive long-term growth outlook for the country.

BMI Political View: Since preliminary peace negotiations took place between the Colombian government and the country's main left-wing insurgent group, the Fuerzas Armadas Revolucionarias de Colombia (FARC), on October 18 2012, the country has seen a spike in violence. According to local media, up to nine Colombian soldiers and one FARC member were killed in three attacks in late October. While we believe Colombia will continue to see broad improvements in security over the coming years, we remain sceptical that the peace talks will result in a definitive end to violence, given the deep-rooted distrust between the FARC and the government, as well as the lucrative nature of the insurgent's activities.

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